Resumen Primer Parcial Pamela.docx

Entrepreneur: Perceive and opportunity to create value, devise a strategy for taking control of necessary resources, inplement a plan of action to make the change possible, harvest the reward that comes from the innovation. Start up: an institution designed to create new product or service under conditions of extreme uncertainty. Entrepreneurship is management: Managing uncertainty, discipline/ management needs measurement. Entrepreneurship: propose creates leadership, leadership requires propose. 5 principle drivers for success: 1Timing: is the marketing ready and demanding for your solution.2 team building and leadership: multidisciplinary team. 3 “AHA” moment. 4 Business plan: strategy, forecasting, margin (executing) . 5 financial: resources Balance Sheet: Assets (current assets {account receivable, cash, inventories}+investment+property, plan and equipment+intangible asset+other assets= total assets) Liabilities & Owners equity (current liabilities {account payables, banks loans/debt, preferred stocks}, Long-term liabilities= total assets) owners equity {stocks investment,profits}=TOTAL LIABILITIES & OWNERS. Balance Sheet: Present wealth in preferred than future wealth, safe assets are preferred than risky assets. Assets: investment decisions (Value comes from the ability to generate cash flows: Technology, infraestructure, equipment, distribution, marketing platforms, knowledge). Financing decision (adventage). Debt financing: Keep full ownership, no obligation after paying debt, interest is tax deductible, short-and long term option, more cash on hand. Equity financing: Less risk than debt, no paying back funds, gain credibility through investor networks, investors don’t expect immediate ROI, fixed payments for better budgeting. Finance – P&L. Forecasting: strategy – operation – returns: Strategy will determine your sales, Operation will determine your costs, Returns will measure your success. Profits and losses (p&l): Sales - Direct costs {initial inventory + goods bought – final inventory} = Gross Margin. Operating Expenses Rent + Payroll + marketing + maintenance + utilities = Total Operating Expenses. EBITDA{Gross margin – total operating asset}+ depreciation - interest – taxes=Net profit Making cash flow decision: Negative returns means further investment will be needed and there is a need to manage your cash while you can get new investments are hang until sales grow. P&L will show you the order you should spend the money flow you can manage Strategy – Operation – Returns Comform The Business Plan: Strat-ups have different business plans than companies, Deviation from results could be due to uncertainty, not necessarily from wrong execution, Degree of external reliance of the plan.

sense, 4 Relying on a team without the CRITICAL expertise. 5 Failing to recognize the threats and potential problems. Strategy – Macro Planning: 1Forecasting (determining Goals): economic objectives, market objectives, operational objectives, social objectives. 2Units Of Measurment: $$$, units sold, tech achievments, social impact. Strategic Planning: choosing course of action for a particular goal (npv), Allowing to plan for several courses of actions and outcomes, Allow to anticipate capital and resource needs. Deciding on the Objective – Purpose: It needs to be measurable, Control: How much control over the entrepreneurship, How aligned to your purpose it is, Equity vs Debt in decision making. Strategic Choices – Interdependency: 1.productmarket strategy: Price, Margin,Quality, Differentiation. 2 operational Strategy: Vertical Boundaries, Horizontal Boundaries. 3 financial strategy: Outside vs Entrepreneur, Debt vs Equit.

Strategic Planning – Integrated Or Not: 1 Product-Market: High Margin-Slow Growth vs Low Margin-High Growth. 2 Operational Design: Part of Value Chain? (ProductionDistribution). 3 Financial Decision: Internal Investment vs Outside Investment (Control?) Decision Trees: Focus on most important choices: Make or buy, Borrow or Issue Equity, fast or slow growth, Reason forward, simultaneous decisions are more branches. •

Key Questions •

Market: What are your market options? Level of demand? what is the level of difficulty of their needs? Can you offer a solution to those needs?

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Operation: What is the level of production needed according to the level of demand? High cost or low cost? Do you have access to that production, or the infrastructure?

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Financing: Always ask yourself if you have the funds available to go into the next phase of the tree.

What Make A Business Plan Convincing? Credible or certified (or with reputation) Evidence What to avoid in a business plan: 1 Failing to identify clearly the customer problem that you will address, 2 Failing to identify clearly a narrow target market, 3 Relying on a business model that makes no economic

Select the highest expected returned value (Not only Financial) branch.

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Opening a Andy´s Computers

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Revise your plan regularly

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Market: Demand - High, Moderate or Low

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Infrastructure: Large or Small

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Operation: Type of production to fill capacity?

PURPOSE - MISSION – STRATEGY

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Organization: values vs knowledge

HYPOTHESIS - BUSINESS PLAN - DECISION TREES

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Location: hi traffic vs new area

TO CREATE A “BRILLIANT” STRATEGY.

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Competition: new entrants – actual competitors

LEARN - PROVING “BRILLIANT” STRATEGY

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Suppliers: quality vs accessibility

IMPLEMENTING VS VALIDATED LEARNING

Entrepreneurs Game

VISION THE BIGGEST CHALLENGE OF A START UP IS SUPPORTING EXISTING CUSTOMER WHILE TRYING TO INNOVATE.

CUSTOMER FIRST

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The business plan: You must decide how much optimism to put into a business plan. Over-optimism is dangerous. Fail to identify real threats.

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Strategic Partnering: Whether to vertically integrate company, allowing new competition from possible allies.

MEASURING VALIDATED LEARNING

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Control: Decide how much control is he willing to exchange for funding

Customer Goals:

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Information Disclosure: Secret vs openness Flexibility vs Commitment

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Committing to a strategy means giving up others.

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Keeping enough flexibility for change is nevertheless is key to limit uncertain negative outcomes. Allow rapid reaction.

THE EFFORT THAT IS NOT NECESSARY FOR LEARNING WHAT COSTUMERS WANT, CAN BE ELIMINATED. MEASURING – FINANCE

Choose your goals:

- Identifying Needs - Customer Satisfaction - Customer Loyalty Financial Goals: - Value Perception (Price) - Operational Validation and Cost - Sales Potential

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Plans help to attain commitment from TEAM Having the original benchmark is what allow the entrepreneur to know failed assumptions.

MAKING FAST COMPARISONS AND DECISIONS PRODUCTIVITY IN A START UP SHOULD BE MEASUERD IN HOW MUCH VALIDATED

LEARNING YOU ARE GETTING FROM OUR EFFORTS.

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BUSINESS PLAN AND GOALS WILL LET YOU COMPARE BUSINESS PLAN VS REAL RESULTS.

FINANCIAL STATEMENT

EXPERIMENTATION IS A PRODUCT YOU HAVE ALREADY STARTED.

START SMALL •

THE AUDACITY OF ZERO IS IMPORTANT. PARTNERS, EMPLOYEES, YOURSELF WILL BENEFIT FROM IT.

THE IMPORTANCE OF VALIDATION •

CREATE STRONG FUNDAMENTALS

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LEARNING COMES FROM THE POSIBILITY OF FAILING.

EXPERIMENT •

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TEST SISTEMATICATLLY EACH COMPONENT OF THE PLAN EMPIRICALLY

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Gross Margin – Gross Profit •

Sales

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Cost of Goods Sold=

EVERYTHING A START UP DOES IS AN EXPERIMENT DONE TO ACHIEVE VALIDATED LEARNING.

MILESTONES – MINIEXPERIMENTS •

BASIC ACCOUNTS – P&L

MARKET EXPERIMENTS

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Initial Inventory

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+ Goods Bought

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- Final Inventory

EBITDA •

OPEX (Operating Expenses)

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Price

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Payroll

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Need

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Utilities

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Package

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Rent

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Product Details

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Maintenance

GROWTH EXPERIMENT •

Location

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Delivery

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Contact Platforms

FLEXIBLE BUSINESS PLAN

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OPERATING PROFIT •

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Depreciation

NET PROFIT •

Interests

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Taxes

BASIC ACOCUNTS – Balance Sheet

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Assets

Organizational

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Cash

What type of employees?

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Inventory

Characteristics and knowledge they should have.

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Equipment

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Infrastructure

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Accounts Receivables

Debt and Equity •

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Debt •

Accounts Payables

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Banks (Loans/Debt)

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Preferred Stocks

Equity •

Stocks (Equity Investments)

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Profits

STRATEGY Product Market Strategy •

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Price •

High Price – Low Volume

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Low Price – High Volume

Market •

B2B (Business to Business)

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B2C (Business to Consumer)

STRATEGY OPERATIONAL STRATEGY •

Value Chain •

Production

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Distribution

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Sales and Service

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Financial Strategy

debt vs equity